Sheri Berman’s book on the past and future of European social democracy makes (at least) two big contributions. First, it takes up Karl Polanyi’s claims about the origins of socialism and fascism and makes something new of them. Berman is explicitly writing in a Polanyian tradition, but she isn’t a disciple or an epigone of Polanyi. Like the social democrats who are the heroes of this book, she takes a classic set of arguments and interrogates and updates them, making claims about what works and what doesn’t, what’s relevant to our contemporary situation, and what isn’t. Second, in so doing she decisively demonstrates the importance of ideas to politics. Her story is one where ideas have dramatic consequences for history. The failure of some socialists to escape from the straitjacket of economistic Marxist thought doomed them to failure and political irrelevancy. The willingness of others to challenge conventional nostrums, and to become actively involved in politics had an enormous historical impact, whether they went to the left (social democrats) or to the right (various strains of fascists and national socialists).
Berman (like Mark Blyth, who also contributes to this seminar) is one of a small group of neo-Polanyians, who are trying to build upon Polanyi’s account of politics so as to provide a better account of how the society and economy in the post-World War II world. One of their key contributions is to wed Polanyi’s arguments with a better account of human agency. Polanyi’s The Great Transformation is a book in which individual agency seems to be subordinated to broader historical trends. Its focus is on how “society” reacts defensively to the depredations of the free market and its relentless commodification of social relationships. Thus, Polanyi’s famous account of the ‘double movement’ in which the excesses of the market inspire a counter-reaction from society. Under this account, socialism and fascism are related; they are different ways in which society has sought to protect itself from the market. The one is a benign effort to restrain the excesses of the market, the other a malign tendency to protect society at the expense of human freedom.
Polanyi’s argument, in its original form, is both intellectually fascinating and rhetorically powerful, but its causal account of how market excesses provoke a response from society is at best a little hazy, and at worst a theory that doesn’t explain the real choices made by human agents (I think that this would be a misreading of Polanyi, but it wouldn’t be a hopelessly off-the-wall misreading). Hence then, the emphasis of neo-Polanyians on clarifying the importance of agency through showing the causal power of ideas. This comes out a little more clearly in Berman’s book than in others in this genre, if only because Berman directly tackles questions that Polanyi himself addressed – the rise of fascism and of socialism as liberal society collapsed in mainland Europe in the 1920s and 1930s. Here, Berman both deepens and revises Polanyi’s account by emphasizing how ideas shaped how different individuals, and the political parties that those individuals worked through responded to capitalism’s internal crisis.
In Berman’s narrative, as in Polanyi’s, there were two antidotes on offer to “economic collapse and social chaos” – social democracy and fascism. Social democracy and fascism were both the result, according to Berman, of long standing intellectual debates within the left over the relationship between economics and politics. Both were movements created by socialists who had grown weary of the passivity of traditional socialism as set out by Engels, and explicated by Kautsky. The reigning orthodoxy emphasized the primacy of economics – economic progress would ineluctably lead to the victory of socialists, who merely had to bide their time. Over time, it became clear that this passive approach was both badly wrong, and a rotten basis to boot for sustaining mass support over the medium term. However, it also proved remarkably resilient. Even if socialist orthodoxy was wrong, it was hard for socialists to get away from. Those who tried to – by advocating even temporary alliances with bourgeois parties – could expect to be vigorously denounced for their heresy. The result was a prolonged and tortuous debate, both within countries and in the International, about the extent to which socialists should participate in electoral politics. In short, those who advocated active politics had a difficult time doing it within mainstream socialism.
On the one hand, social democrats, who wanted socialists to get involved in electoral politics and take power through non-revolutionary means such as getting involved in coalition government, weren’t able to bring other socialists along with them. Some tried to stick it out and to build compromises with more zealous colleagues, sometimes emphasizing to them the need to protect the real advances made by the liberal state by participating in democratic politics. The result was often an unhappy halfway house, as in the German SPD, which participated in elections in the Weimar Republic, but refused to fully embrace it. This cost German social democracy, and the rest of us, dearly over the longer term. Where social democrats were willing fully to embrace existing democratic forms and to extend their appeal beyond the working classes, as in Sweden, they created the basis for a long-standing, and largely successful political compromise. This compromise didn’t seek to eliminate the market (although perhaps the Meidner plan came close), but instead to manage and subordinate it.
On the other, some socialists embraced a more radical notion of politics and of revolution that had little time for bourgeois democracy. Georges Sorel and other syndicalists began with demands that socialists foment massive general strikes, and ended by drifting away from socialism altogether, in favour of other ‘myths’ that might help inspire large scale political action, most prominently nationalism. This helped create the conditions for a synthesis between the nationalist movement and elements of the socialist movement in Italy and Germany. National Socialists retained many of the aspirations of social democrats, and made many of the same promises. Like social democrats, their main appeal was that they offered economic stability and security to the masses.
Hence the first part of Berman’s argument – that fascism was, in a sense, social democracy’s dark twin. They shared common ancestry in internal debates among socialists. There was crossover between the two, as erstwhile social democrats became fascists. Finally, there were substantial similarities in their economic policies, and in the ways that they tried to appeal to mass publics. Both represented revolts against a kind of ideational orthodoxy, in which the economic base determined the limits of politics. Both, indeed, sought to use political means to tame the market and to bring it under control. The political forms that they took were very different. Social democrats accepted democratic principles, even as they hoped that they might subordinate the free market to collective needs. Fascists, very clearly, did not. Even so, they had more in common than either might have liked to admit. Both moved away from an emphasis on the historical role of the proletariat towards a kind of communitarian politics, in which the national home replaced the working class as the relevant community of solidarity. While Fascist and Nazi ideology obviously appealed directly to nationalism, so too did Swedish social democracy, with its emphasis on the folkhemmet or ‘people’s home.’
The second part of Berman’s historical argument is less completely sketched out, but perhaps more important to the political story that she wants to tell. Berman argues that after the defeat of fascism, social democracy won more or less completely in Western Europe. Many political scientists, following John Ruggie, have seen the post war period through the 1970s as the triumph of ‘embedded liberalism’ – a form of liberalism managed through agreed practices and institutions, including most prominently the Bretton Woods institutions at the international level. Berman disagrees. She argues that the key principles of social democracy, as they were hammered out during the pre-war era, were what anchored the post-WW II system. Social democracy was based around the ideas of controlling the market and communitarianism – market forces had to be reined in if communities were to survive and to thrive. The market became increasingly subject to political forces, thanks to nationalization. Welfare states were based upon, and sought to perpetuate, a sense of collective belonging. Keynesianism sought to manage the economy without lapsing into totalitarianism. All of this was a far cry from what Marxists or classical liberals wanted; instead, it “most closely corresponded to … the mixture of economic policies championed by social democrats, fascists and national socialists together with the commitment to democracy that social democrats displayed but that fascists and national socialists decidedly did not.”
This suggests to Berman that social democracy was more than a set of policies, or a compromise between Marxism and liberalism; it was an ideology all on its own. While she doesn’t say it explicitly, her argument suggests that social democrats are really closet Polanyians, concerned to prevent society from being gutted by the market, and imposing the necessary constraints to prevent this from happening. This also makes Berman believe that social democracy is newly relevant today. As in the 1920’s, markets are regarded as all-powerful, and people don’t seem to like it very much. There’s a clear opportunity for social democrats to come to the fore again, by stressing the need to protect community, using markets for their clear economic benefits, while protecting citizens from their worst depredations. Markets should be expanded, but they also should be managed. What’s holding back social democrats isn’t that this is impossible, but that they’ve lost their will. Rather like the socialists of a previous generation, they are paralyzed by a set of ideas that they know to be failing, but lacking the self confidence to articulate new ones.
Enough summary. This book excels in showing how ideas really matter to party politics and to politics more generally. Many of the most important choices made, leading to radically different political outcomes in Italy, Germany, Austria, France and Sweden. Most obviously, those socialists who subscribed to Kautskyan orthodoxy in one of its variants found themselves trapped by their ideas, unable to engage seriously in politics, even when they knew that they had to. Rudolf Hilferding (whom I had never known was a confidant of the conservative chancellor Bruening, even while he was the SPD’s main economic theoretician) lamented that the socialists had no proposals to end the economic crisis, even as he stymied efforts to introduce economic planning which was intended to address just this political need. But so too did ideas empower Swedish social democrats to introduce innovations in economic policy that helped cement their long term political dominance.
It furthermore illustrates the organic connections between social democratism and fascism in a clear, but objective way . Again, some details that were new to me – such as that Gramsci had been a devoted follower of Mussolini during the period when Mussolini was a radical socialist. Her account emphasizes the importance of socialist influences on fascism and national socialism at the expense of right wing ones – I’d have liked to have seen, for example, some discussion of how Catholic versions of corporatism intersected with syndicalism in Mussolini’s ideology. But that’s probably unavoidable, given her purpose in the book, and the need to make it readable, short and coherent.
Berman however does make two major claims that I want to disagree with. First, I’m not at all sure that the book does what it sets out to do – to show that social democracy, rather than liberalism was the basis for the post-WWII order. As a social democrat, I’d like to believe this, but I’m not sure that the evidence supports it. Berman shows, pretty decisively in my view, that social democracy played an underappreciated role in creating this order. But by the same token, she discounts the role of liberalism too much – the post WWII European order was a compromise between social democrats and liberals (and indeed, Christian Democrats too).
There’s one sentence in particular that bugs me. On page 179, Berman argues that “If liberalism can be stretched to encompass an order that saw unchecked markets as dangerous, that had public interests trump private prerogatives, and that granted states the right to intervene in the economy to protect the common interest and nurture social solidarity, then the term is so elastic as to be nearly useless.” Here, Berman seems to me not to treat arguments and differences within liberalism with the same seriousness as she treats arguments among the various tendencies within the broad socialist movement. There was a long standing tradition of liberalism, especially on the continent, that had a rather more ambiguous attitude toward the state and toward community than gung-ho Manchester liberalism. For example, James Sheehan in his intellectual history of German liberalism, depicts them as fatally split in their attitude to the state – on the one hand recognizing that the state was the guarantor of the social order that the middle class needed (not least because it helped keep the lower orders in their places), and on the other tempted by the sirens of the untrammeled market. Indeed, Sheehan quotes an evocative bit of cod-Arthurianism that perfectly captures this ambiguity – a nineteenth century liberal’s description of the state as “the spear that heals as well as wounds.” Internal liberal debates weren’t just Manchester economists shouting at each other; they involved a wide array of different positions on the role of state and market.
Or, to put it another way, Berman provides us with an analytic narrative about the emergence of social democracy as an escape from the rigidity of economistic Marxism. Couldn’t one tell an equally convincing narrative about arguments within liberalism between rigid, hidebound laissez-faire economists and other, more socially concerned liberals, leading up to Keynes’s synthesis which had the political aim of saving the market from itself (and then leading into the evolution of Keynesianism and its eventual collapse)? Keynes is a pretty tough sticking point for Berman’s account. As she acknowledges, his ideas were enormously important in shaping the post war consensus about how markets should be controlled. But while (as Berman discusses) Keynes’ ideas had a substantial impact upon social democracy, Keynes can under no serious account be held to have been a social democrat himself. He saw himself as a liberal, his most important arguments were with other liberals, and his political aim was to shore up, as best he could, the existing liberal order by subordinating markets to politics where necessary to secure stability.
One could make similar claims for Christian Democracy. Again, Christian Democracy involved a set of ideas about the role of the state, the need to protect the fabric of society and so on, which fed into the post-WWII order. I think it would be exceedingly tough to show that Christian Democrats were the slaves of social democratic ideology without knowing it – while there was surely intellectual interchange between the traditions, they started from very different places. Quadragesimo Anno shares a lot of common ground with social democracy as Berman defines it, but it starts from a very different place indeed, and ends up too, at a destination that few people would want to define as social democracy.
All this suggests to me that Berman’s criticisms of Ruggie are well founded – the post war order was something much more complicated than a moderated form of liberalism – but that her claim that it was instead social democracy all the way down goes too far. My strong intuition (and it’s not much more than that; a lot of research would be needed to validate or invalidate it) is that this order was a sometimes uneasy synthesis between social democracy, and other political philosophies, all of which agreed, albeit for differing reasons, on the need to moderate and control market forces.
My second disagreement perhaps flows from the fact that I’m a social democrat who doesn’t consider myself to be a communitarian. Berman suggests that one of the reasons why social democrats should be communitarians is that if they aren’t, they’re liable to be out-competed by nationalists benign or nasty, who will steal their clothes, just as they did between WWI and WWII. This is a plausible empirical claim, albeit one that if true I would find pretty uncongenial. But Berman’s account can be read in another way too. If social democracy and fascism are cousins-german, then there’s a very plausible risk that social democracy, if it goes too far in this direction, can lapse into a sort of fascism-lite. This strikes me as a particular political risk in Europe today. A political debate is beginning to take shape in which the right is making significant political advances by attacking immigrants and Muslims in one way or another. This of course ties into wider debates about Europe’s role in the world, the possible accession of Turkey to the EU etc. In many countries, I suspect that there’s a big opening for a leftwing political party that combines robust economic populism with equally robust nativism and hostility towards immigrants. So far, to my knowledge, no party has really taken advantage of that opening. Berman’s account leads me to suspect that this failure is an accident of history, and not to be taken for granted. The worry that social democrats will be outflanked by the nastier sort of nationalist is a real one. But there’s also a real risk of social democrats going too far in embracing nationalist and exclusionary rhetoric with consequences that could be nearly as unpleasant. Hence, my preference at least for a social democracy that at the very least leavens its communitarianism with a broader, more international set of solidarities, and thus is less likely to be hijacked.